The importance of strategy selection in management

The choice of strategy is the key to the success of innovation. Firm may be in crisis if it fails to foresee changing circumstances and respond to them on time. The choice of strategy is an essential component of the innovation cycle management. In a market economy, it’s not enough for a leader to have a good product, he must carefully monitor the emergence of new technologies and plan their implementation in your company so as not to lag behind competitors. Strategy can be combined with decision making. In both In cases there are goals (objects of strategy) and means by which set goals are achieved (decisions are made).A clearly articulated strategy is important for promoting innovation. Strategy means an interconnected set of actions in the name of strengthening viability and power of the given enterprise (firm) in relation to its competitors. In other words, a strategy is a detailed comprehensive plan.

A growing number of firms recognize the need for and actively implementing it. This is due to growing competition. We have to live not only today, but to foresee and plan possible changes in order to survive and win the competition. The development of research plans and development and other forms of innovation. Strategic planning has two main objectives:

• 1.    Efficient allocation and use of resources. This is the so-called "internal strategy". Planned use of limited resources, such as capital, technology, people. Also carried out acquisition of enterprises in new industries, exit from undesirable industries, selection of an effective "portfolio" of enterprises.

• 2.    Adaptation to the external environment. The goal is to ensure effective adaptation to changes in external factors (economic changes, political factors, demographic situation, etc.).Strategic planning is based on numerous research, data collection and analysis. This allows you to not lose control over the market. It should be borne in mind that in today's world is changing rapidly. Therefore, a strategy must be developed so that, if necessary, it can be eliminated. Strategy development begins with the formulation of the overall goal of the organization. It should be understood by any person. Goal setting plays an important role in the relations of the company with the external environment, the market, the consumer. The overall objective of the organization should take into account:

• *    the main direction of the company;

• *    working principles in the external environment (principles of trade; attitudes to to the consumer; conducting business relations);

• *    Organization culture, its traditions, working climate.

When choosing a goal, two aspects must be taken into account: who are the clients of the company and what needs she can satisfy. After setting a common goal, the second stage of the strategic planning - specification of goals. For example, can be defined The following main objectives:

• 1.    Profitability - to achieve a net profit level of 5 million d this year. e.

• 2.    Markets (sales volume, market share, introduction of new lines). For instance, increase market share to 20% or increase sales to 40 thousand units.

• 3.    Performance. For example, the average hourly output per working 8 units.

• 4.    Products (total output, release of new products or withdrawals some models from production, etc.).

• 5.    Financial resources (size and structure of capital; ratio equity and borrowed capital; the amount of working capital, etc.).

• 6.    Production facilities, buildings and structures. For example, build new warehouse space of 4000 square meters. meters.

• 7.    R&D and implementation of new technologies. Main characteristics, technological characteristics, cost, terms of implementation.

• 8.    Organization - changes in the organizational structure and activities. For instance. Open a representative office in a certain region.

• 9.    Human resources (their use, movement, training, etc.).

• 10.    Social responsibility. For example, allocate certain funds on hospital equipment.

So that the goal can be achieved, one must proceed from the following principles:

• 1.    A clear and specific statement of purpose, expressed in specific measuring instruments (cash, in-kind, labor).

• 2.    Each goal should be limited in time, set its term achievements (for example, to establish serial production of a new model of meat grinder to end of the 3rd quarter).Goals can be long-term (up to 10 years), medium-term (up to 5 years) and short-term (up to 1 year). Goals are specified taking into account changes in the situation and control results.

• 3.    Goals must be achievable.

• 4.    Goals should not negate each other.

Strategic planning is based on a thorough analysis of external and Firm's internal environment:

• *    changes occurring or might happen in the planned period;

• *    identifies factors threatening the position of the company;

• *    The factors favorable for the company’s activity are investigated.

Processes and changes in the environment have a vital impact to the company. The main problems associated with the external environment are economics, politics, market, technology, competition. A particularly important factor is competition. Therefore, it is necessary to identify main competitors and find out their market positions (market share, volumes sales, goals, etc.).

It is advisable to conduct research on the following directions:

• 1.    Assess the current strategy of competitors (their behavior in the market; tricks promotion of goods, etc.).

• 2.    To study the influence of the external environment on competitors.

• 3.    Try to collect information about scientific and technological developments rivals and other information and forecast future action competitors and outline ways to counter. A thorough study of the strengths and weaknesses of competitors and comparing them results with your own indicators will allow you to better think out a strategy competition Serious environmental factors include socio-behavioral and environmental factors. The firm must account for changes in demographic situation, educational level, etc. For example, training needs for a market economy, the transition to which is carried out in Russia, expands the markets of textbooks on management, marketing and others. The analysis of the internal environment is carried out in order to identify strong and weak parties in the activities of the company. Strategy is the starting point of theoretical and empirical research. Organizations may differ in how much their leaders key decision makers associated with use strategy innovations. If top management supports efforts to implement innovation, the likelihood that the innovation will be accepted for implementation in organization is growing.

As you engage in decision making top management, the importance of strategic and financial goals is increasing. The developed strategy is rarely purely formal and based partly on the assessments and intuition of several employees from higher guides.